There are three tiers to the global mining industry, and it is the third tier – known as the “junior” space – that is familiar to many entrepreneurs involved in early-stage projects. This is where Vancouver’s Richard Warke has established a winning reputation.
Junior mining companies generally focus on exploration, identifying targets, building a team to manage the project and raising money from family, friends and other supporters to fund their activities. If good projects and teams can be assembled, as Richard Warke has done multiple times, there is potential for significant returns on investment.
But, Warke will be the first one to tell you that achieving success is not easy.
Richard Warke has spent more than 25 years in the international resource sector. He has started, grown and sold a number of successful exploration and development companies. In 2005, Warke founded the Augusta Group of Companies, a conglomerate of public and private business. Warke’s sale of Arizona Mining Inc. last summer for C$2.1 billion, reflecting an increase of 6,100 percent on his initial investment, solidified his standing as one of the most successful junior mining executives in Canada.
When the media writes articles about you, the focus is often on the returns you’ve achieved for your investors. What stories behind the headlines are missed?
Richard Warke: Exploration and development is a risky business. There are many variables that have to be properly assessed in order for a project to succeed. A positive outcome requires strong leadership, favourable geology and metallurgy, funding and technical expertise to find and evaluate prospects, skilled labour, social licence and the ability to get the required permits, amongst other factors.
What aspect do you think may be most underestimated?
Richard Warke: I can’t emphasize enough that I’m not a one-man show, and I don’t hire people who are just like me in terms of education and perspective. I make a point of surrounding myself with professionals who can add value based on their expertise and experience. This variety enriches our corporate culture and allows us to make better decisions for our businesses. I have been successful because we have made a great team.
You’ve been called smart and shrewd. Do you think luck enters into the equation?
Richard Warke: It’s a great combination to be lucky and smart, don’t you think? You can make your own luck if you’ve positioned yourself properly, but sometimes fate plays a role. In 2014, when we sold Augusta Resource Corp. to HudBay Minerals, we started off with a hostile offer. An ocelot had been photographed near our Rosemont project in Arizona, a highly unusual spotting in that location. As a result, permitting was delayed. We decided to rethink our options, resulting in a friendly deal.
Some have termed Arizona Mining your “grand-slam” project even though it was Ventana Gold that had the large 13,000 percent appreciation. How do you see it?
Richard Warke: Arizona Mining’s zinc, lead and silver Taylor project near the U.S./Mexican border was an exciting project no matter how you looked at it. I am proud of how our team discovered this world-class deposit which is expected to become one of the five biggest zinc mines globally. I don’t know if I was totally ready to sell it, but the reality is that we have a responsibility to our shareholders. We had a good offer, and accepting it was the smartest, least risky move for us to make at the time.